Why Europe is sending thousands of tonnes of gold to a secret vault in the United States

Why Europe is sending thousands of tonnes of gold to a secret vault in the United States? In the heart of New York City, beneath a concrete and steel facade, lies one of the world’s largest “gold vaults,” storing thousands of tonnes of gold not owned by the United States. Importantly, the gold bars come from Europe’s wealthiest nations. Why are they sending strategic assets across the Atlantic? Few people know that the Federal Reserve Bank of New York actually serves as a gold custodian. Official data show it stores about 6,300 tonnes of gold, with 98% belonging to foreign central banks and governments. Who is sending the most gold to the US? There is no publicly available complete list of owners of the gold in the New York Fed’s vault, but data from central banks and financial institutions indicate that most of this gold belongs to European countries, especially large economies that experienced wars and geopolitical upheavals in the 20th century. The underground vault in New York stores thousands of tonnes of gold for countries around the world. Photo: ET-Edge Among them, Germany is viewed as the largest contributor. The German central bank has acknowledged holding about 1,200 tonnes of gold in New York, a large share of the country’s reserves. Although it began a program to repatriate gold in 2013, Berlin still maintains about one-third of its gold reserves in the United States. Following is Italy, a country with more than 2,400 tonnes of gold, among the world’s top holders. While allocation details are not published, market reports show a significant portion of Italy’s gold reserves are kept abroad, including in the US, to facilitate financial transactions and ensure quick access to global markets. The Netherlands and Belgium have also historically held sizable shares of gold in New York. In recent years, however, these two countries have actively moved portions of their gold back home, in a broader trend to increase control over strategic assets. Switzerland, by contrast, employs a flexible allocation strategy, splitting gold among domestic storage, the US, and the UK. Unlike much of Europe, France has long pursued a policy of limited dependence on foreign gold stores. As early as the 1960s, Paris moved much of its gold back home and remains one of the countries with the highest proportion of domestic gold. Why does world gold flow toward the US? The gold story in the US actually began at a very specific time: after World War II. Europe was largely exhausted, while the US emerged as the strongest and most stable economy in the world. Therefore many countries sent gold to New York not only for storage but also to “hide” within a system considered the safest at the time. The repatriation trend has gained momentum as many countries seek to directly control their strategic assets. But safety is only half the story. The other half lies in convenience. The Fed New York vault is not just a storage facility; it also functions as a gold trading hub. There, countries can buy and sell gold with each other with little physical movement: ownership can be transferred between storage compartments to complete a trade. Because New York is a global financial hub, keeping gold there helps central banks react quickly to market movements. Also, after Bretton Woods, the USD became the center of the international monetary system and could be directly exchanged for gold. This made keeping gold in the US more sensible: convenient for trading and tied to the global financial power center. During the Cold War, concerns about conflict with the Soviet Union led Western European countries to move gold to the US as an ideal “reserve stock.” The wave of gold repatriation is accelerating However, this trend is gradually changing. In the past decade, many countries have quietly brought their gold home. Germany is a prime example, moving hundreds of tonnes of gold from New York and Paris back to Frankfurt. The Netherlands has done the same, while France is hardly dependent on US gold stores anymore. The reasons are not only technical but also political. Recent global shifts, especially the possibility that sovereign assets could be frozen in geopolitical conflicts, have prompted many countries to question whether their gold is “absolutely safe” outside their borders. Additionally, domestic pressure is rising. Citizens and politicians in many countries are calling for direct government control of strategic assets rather than reliance on foreign storage. Tử Huy (Source: Federal Reserve, New York Fed, FT, The Guardian)